Community Health swings to Q3 profit, tees up replacement to long-time CEO Smith

Dive Brief:

  • Community Health Systems on Tuesday reported a profit of $112 million after posting a loss during the same quarter a year prior. That’s also up from Q2’s $70 million profit, despite lower volumes and rising expenses amid the ongoing pandemic.
  • The Franklin, Tennessee-based chain beat Wall Street estimates, though it reported $3.126 billion in net operating revenue, a 3.7% decrease compared to the same period a year prior. Admissions on a same-store basis decreased 6.2% compared with the prior year period, and fell 11.5% for adjusted admissions.
  • CHS also announced a leadership switch-up – Tim Hingtgen will replace long-time CEO Wayne Smith effective Jan. 2021, and Smith will become executive chairman.

Dive Insight:

CHS is the latest for-profit hospital chain to report its third quarter earnings amid an ongoing pandemic and fast approaching flu season, though those headwinds haven’t stopped it from turning a profit.

In tandem with reporting results, the company said Smith, who has been CEO since 1997, will step down from that role come next year.  Smith had spent more than two decades at payer Humana prior to taking the helm at CHS.

The chain owns, leases or operates 89 affiliated hospitals in 16 states, after selling several hospitals this year as part of a years-long divestiture plan.

Other chains that have reported Q3 earnings include HCA, posting a $668 million profit up 9% from the same time last year. Results came as the hospital giant returned hundreds of millions in government grants early and it faces COVID-19 surges in key markets.

Tenet however suffered a net loss from operations of $197 million in the third quarter, driven by spiking COVID-19 caseloads in many of its markets, along with higher operating expenses and lower admissions.